BENEFITS SET TO DIM

End of state rebate for rooftop solar looms, but other options for savings remain

State rules help

Sullivan Solar, a top contractor for solar installations in San Diego County, had its biggest sales month ever in July, while advertising solar panels as “energy independence against utility rate increases.”

Daniel Sullivan, president of the company, said the sector’s success is underwritten chiefly by state rules for billing customers. Those regulations effectively double kilowatt-hour rates for households using the most energy over the least intensive customers.

“The more energy that somebody uses, the more they get charged per unit of energy,” Sullivan said. “So that has driven many people to produce their own clean energy to avoid those expensive bills. It’s responsible for catapulting California to being the solar leader in the United States.”

In addition, solar customers can offset much of their electricity bills with credits for the energy they generate. All but 6 percent of rooftop solar capacity in California uses that arrangement, known as net metering, according to an assessment by the state utilities commission published in July.

Utilities including San Diego Gas & Electric say the state’s electricity metering and billing policies are forcing nonsolar customers to shoulder a disproportionate and increasing share of service costs. Solar customers, still tied to the grid, have avoided their fair share of infrastructure costs, the utilities assert.

A bill working its way through the state legislature would allow utility regulators to overhaul billing rules, with implications for solar customers.

Net metering could be suspended as soon as the end of 2014 if a compromise cannot be reached on rule revisions.

The federal Investment Tax Credit for solar, worth up to 30 percent of the cost of a rooftop solar installation, expires at the end of 2016.

For the time being, that patchwork of incentives has coincided with rapid adoption of solar. San Diego Gas & Electric says between 700 and 800 rooftop solar arrays are being installed each month in its territory. About 26,000 SDG&E customers now generate their own solar power.

While generally less cost efficient at churning out power than large-scale solar plants, rooftop solar eases the need for expensive transmission lines and substations.

Sacramento has set a goal of generating 12 gigawatts of small-scale, self-generated electricity capacity by 2020, principally through rooftop solar. Separately, the state is requiring electricity retailers to generate one-third of their power from renewable energy sources such as solar, wind and geothermal plants by 2020.

Waitlist grows

The administrator for solar rebates in San Diego, the California Center for Sustainable Energy, continues to add to its waitlist for residential rooftop rebates, pending a request to shift resources from other rebate categories.

An average-sized rooftop solar installation for San Diego County costs between $18,000 and $28,000, before federal tax rebates.

Homeowners can reduce or avoid startup costs and borrowing by signing a lease agreement with companies like OneRoof, SolarCity and SunRun, typically for a 20-year term. Leases are designed to provide savings on monthly utility bills, but in general provide a smaller potential for long-term savings than purchasing.